Commentary

Unwelcome Emails: Channel Should Not Be Used For Collections

Email is the most popular channel of communication for UK credit card holders. Almost 80% prefer it, putting it ahead of phone calls, live chat, mobile apps and SMS, according to a study in Auriemma Consulting Group's recent issue of UK Cardbeat.

That’s good news, we suppose. But it is giving some issuers the crazy notion that email should be used for collections.

Bad idea. But before we trash it, let’s give them their say.

First, UK Cardbeat notes that card issuers have not yet invested heavily in email and other digital channels for service or collections. But the idea is on the table.

This came up during a recent gathering of collection people at Auriemma's Collections and Recoveries Roundtable in London.

"The industry knows that email could be a highly successful contact channel, particularly for those in collections who tend to close off contact at some point in the lifecycle," states Louis Stevens, Director of UK Industry Roundtables.

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He adds: “There is opportunity to develop email as a priority channel instead of a supplementary one.”

He concedes, however, that “many collections operations today are centered around a call-and-collect model, which could be less effective as cardholders skew toward preferring digital communication." 

Are they really?

Granted, some cardholders might prefer an email over a live collection call, and they might even consent to it as per GDPR. But it depends on the “stage in the lifecycle,” and how it’s done. Sending a bill is one thing, and nagging people when they are late is another. Most creditors don’t call by phone until they get to the second stage.

It’s not clear whether this tactic is catching on in the U.S. But here’s why it won’t work.

Email should be seen as a strictly positive medium — as a vehicle for offers, shipping information and other useful updates.

It should never used in a way that will irritate people. Consumers should not be afraid to open emails, especially knowing that the sender will see that they have done so.  

For one thing, people may be wary of opening messages that lack a compelling call to action or seem hostile in intent. What are they going to say -- “Second Notice?”

Perhaps it would work if the email simply links to a private web page, using the subject line “Account Update.” But that is dubious.

And social media? What are they going to do, publicly remind the person of the debt on their Facebook timeline?

Here is a more serious issue — that email is not usable when collection gets to the threatening stage. Last year, a federal judge ruled that an email attachment does enjoy the same presumption of receipt as a letter sent by postal mail.   

U.S. Judge Debra McVicker Lynch determined that debt collector Met-1 Solutions had not “sent” notices to plaintiff Beth Lavallee, as required by the Fair Debt Collection Practices Act (FDCPA), when it included them in email attachments. 

Lynch, a magistrate judge with the U.S. District Court for the Southern District of Indiana, Indianapolis division, observed that “not opening an email attachment is not the same as failing to open a letter one receives through the United States Postal Service mail system.”

But here’s the main point, and we bet it’s true of any stage in the collection cycle — that while “consumers may open emails from companies to which they had given their email addresses, (the plaintiff) Lavallee would not have seen as safe an email from Med-1 Solutions,” the judge wrote. “Today, email users are regularly warned and know to beware of email invitations to click on web-based attachments."

The judge is right. Why make a bad situation worse?

 

 

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